“Mobile” has revolutionized the way we do things. This remarkable technology has taken the reality of accelerated information flow – and placed it into the palm of our hands. Few places remain out of reach and out of touch with smartphones and other ever more capable devices. Each day, clever people find new and interesting ways to use our connected world.
Mobile technology offers an opportunity to extend traditional banking by introducing a new way of accessing retail payments, as well as retail and wholesale banking services.
Today’s mobile devices enable users to perform banking functions such as :
- Paying bills
- Opening accounts, accessing account balance information and reviewing transaction history
- Transferring funds between accounts or to a third party
- Locating cash machines and/or bank branches for face-to-face banking
- Paying at the point of purchase, either by some prepayment method, by direct funds transfer or by using third-party payment methods controlled by the individual user.
And this is just a partial list of functionality. For example, “loyalty programme services” are certain to grow in the mobile payments/banking arena. To better capture the breadth of these functions, as well as other functions or variations that may emerge, it might be more accurate to use the term “mobile commerce”. So, whether one speaks of mobile payments or mobile banking, or even mobile marketing (including loyalty solutions), a common thread is the need for standardization of the data elements and message structures for achieving such functionality.
Critical to the success of retail payments, in particular, is the need for a standardized interface between devices and various individual payment systems. Without ubiquity and transparency for users of the different systems, it is difficult to see how a truly mobile payments environment can emerge.
Making it happen
Working hard to make this happen is ISO working group WG 10, Mobile banking / payments, in technical committee ISO/TC 68, Financial services, subcommittee SC 7, Core banking. Since late 2009, the working group has set out to define the core procedures needed when accessing users’ deposit and credit accounts, focusing on transfers of value and leveraging and extending existing ISO standards for payment capabilities. We are also committed to not reinventing the wheel by using existing work from the European Payments Commission.
But the group faces a major challenge. “What is mobile” is an ever-changing question. When the need for a working group was first discussed, smartphones were rare and limited principally to business users. Before the group was formally announced, the iPhone was introduced and the age of the smartphone was upon us. Soon after came the iPad and tablet computing.
With all of these form factors in mind, as well as continuing dialogue around devices that do not use a mobile telephone carrier but look and feel like these mobile devices, the working group set out to decide the scope of our endeavours.
As a result, the future standard ISO 12812 will address :
- Security and data protection for mobile financial services
- Financial application management
- Mobile person-to-person payments
- Mobile person-to-business payments
- General requirements for mobile banking applications.
Our goal is to learn from the past and build for the future. The most successful payment systems, the debit and credit card, are almost ubiquitous and can be initiated almost everywhere on the globe. The working group hopes to emulate and expand on this success.
But we will also look at successful models in nations where bank accounts, and therefore debit and credit cards, are rare – such as M-PESA in Kenya, a mobile phone-based money transfer service that allows branchless banking – to see if they can be incorporated into the standard.
The market is dynamic and many players want to gain proprietary advantage. But, importantly, there is still room for standardization because for a payment system to gain traction, it needs to be broadly adopted, and it needs to allow for open commerce. The models that win will support all the necessary – and only the necessary – parties to the transaction; and winning models must also respect, but cannot be limited by, national borders.
Mark SB Tiggas is Senior Vice- President of Wells Fargo Bank, N.A., based in the USA. He heads the enterprise payments architecture team, which has an indepth knowledge of industry trends and payment technologies. The team guides and coordinates payments technology-related enterprise investment decisions that maintain or enhance Wells Fargo’s position. Mark has been an active member of the national and International Standards development community. He is Convenor of ISO/TC 68/SC 7/WG 10.